This report looks at the possible consequences of a hard Brexit, following an unsuccessful conclusion of Article 50 negotiations between Britain and the European Union. On its departure from the EU, Britain would presumably adopt the EU’s current “Schedule of Concessions" agreed at the World Trade Organization. This would involve imposing tariffs by the EU on UK exports, and the UK will in turn impose tariffs on imports from the EU. This report provides estimates of what these “tariff" costs are likely to be. These are then used to examine the “ripple" effects through the rest of the economy using Input-Output analysis. This is a powerful analytical approach well suited to exploring the sector impacts of economic policy changes.

The results of four different Brexit related scenarios are shown below. The scenarios start out narrowly by just considering trade impacts, and are then extended to include broader changes in demand.